An investigation into a R66-million lottery grant awarded to Netball South Africa has raised concerns about possible “maladministration and/or gross negligence” by the agency responsible for approving the funding and suggests litigation to recover any losses. The grant was intended to fund the construction of dozens of all-weather netball courts in all nine provinces, as a legacy of the 2023 Netball World Cup hosted in Cape Town.

Yet the project remains incomplete and has become embroiled in controversy, with allegations of impropriety and concerns about how the money was approved and implemented. The National Lotteries Commission (NLC) commissioned Open Water Advanced Risk Solutions to investigate the multimillion-rand grant awarded by the NLC’s Sport and Recreation Distributing Agency (SRDA).

Open Water found conduct that was “indicative of maladministration and/or gross negligence” by the SRDA and advised that the NLC should consider civil legal recovery against former SRDA members jointly and severally if financial losses can be identified and quantified. GroundUp has reviewed sections of the Open Water report concerning the “conduct of the SRDA”, including the findings. The NLC has handed its records relating to the funding to the Special Investigating Unit (SIU), including a recording of the meeting at which the grant was approved.

The NLC confirmed it has implemented “consequence management” for officials identified in the forensic report under its disciplinary policies and procedures but declined to disclose which officials were disciplined or the outcomes. Former SRDA member Dr Harold Adams, who participated in the decision to award the grant, rejected the investigators’ conclusions. Adams said the investigators got it wrong and argued that Netball SA submitted a “below par” application as part of a “targeted call” covering only four provinces.

He said the budget of R300,000 per court was unrealistic and argued that an additional application from the Netball Local Organizing Committee (LOC) World Cup Legacy programme aimed to expand netball to all nine provinces in line with commitments made by NLC authorities in 2018/2019. According to Adams, the SRDA committee decided to allocate about R60-million for infrastructure toward the Netball LOC legacy programme.

Adams said the NLC holds the blame, arguing that monitoring and evaluation officials did not properly do their jobs. He said that after the SRDA members’ contracts ended on 30 April 2023 and that no contact was made to question anything unclear, Netball SA nevertheless proceeded with implementation. Adams also said Netball SA should never have been allowed to implement the legacy project, and that once the SRDA members left, NLC officials were responsible for ensuring the conditions set at the SRDA meeting were followed.

He claimed the SRDA had instructed that if the NLC authority decided the infrastructure money could not be allocated directly to the legacy fund, there should be a formal meeting between Netball SA, the NLC and the legacy group to agree how the allocation would work. He added that the SRDA wanted two separate grant agreements and monitoring and evaluation that would confirm land, plans, and an acceptable maintenance plan before money was paid.

The funding story is central to the dispute. Netball SA originally applied for R11.9-million for infrastructure and training activities, including construction of 20 all-weather courts in four provinces. Instead, the SRDA used discretion to increase the grant by more than five times. The expanded funding included R60-million for construction of 65 courts across all nine provinces, as reflected in a tender issued by Netball SA in September 2023. Additional funding included R3-million for marketing and branding of the legacy programme and a further R3-million for “capacity building” for skills development of umpires, coaches and administrators.

According to the report, after paying R3-million in June 2023 for marketing and branding and R21-million in March 2024 for construction, the NLC halted payment of the next two tranches of R21-million each. The payment freeze followed concerns raised by an NLC monitoring and evaluation official, which led the NLC to commission Open Water for a forensic audit.

The NLC said progress across locations varied, with some courts constructed or refurbished while others remained incomplete, delayed, or not handed over, and it stated quality and compliance issues were identified at several sites. Netball SA’s president, Mami Diale, told GroundUp the organisation was surprised by the increased funding and said only five sites had been certified as “practically complete”. Netball SA said R14.3-million was paid to contractors before further payments were frozen.

Five companies tendered successfully, four for design and construction of the courts and a fifth as national project manager. The amount allocated to these companies was over R57-million, and all the contracts are being scrutinised by the SIU. The SIU is also investigating the R3-million marketing and branding contract. Three SRDA members adjudicated the grant: Mveli Ncula, who chaired the meeting, Harold Adams and Raymond Mali.

A senior NLC administrator was present but was not part of the adjudication decision. Ncula’s and Adams’ SRDA tenures ended on 30 April 2023, while Mali’s ended on 30 April 2024. Open Water said SRDA members have a fiduciary duty to act in the best interests of the National Lottery Distribution Trust Fund and its beneficiaries. It stated that where maladministration and gross negligence lead to financial damages, SRDA members may be held liable through civil legal recovery action, either fully or partially.

Adams, however, said he had not received any report to comment on and described the allegations as unfair. Neither Mali nor Ncula responded to questions submitted via WhatsApp. In response to Adams’ claims, the NLC said grant applications are adjudicated by the SRDA, which operates independently from the NLC commissioner in terms of the Lotteries Act. It said the commissioner signs off on grant applications that have already been adjudicated and quality-assured by SRDA members, and that the Netball SA grant was signed off based on SRDA recommendations.